Post-Brexit: Tour Operators Predict What It Means For Travel Agents
by Jessica Montevago /
The travel industry is watching closely as the United Kingdom departs the European Union for unchartered waters. After the vote last week, the British pound plummeted to its lowest levels in three decades, and even though it has leveled off for now, economists suggest that in the long term its value will remain lower. The U.S. markets, meanwhile, which also dipped sharply, have largely recovered.
All that adds up to a good story for U.S.-based travel agents: travel to Great Britain is a bargain. And that might be just the push clients need to get off the fence about booking a European trip.
“We’d love the pound to stay down because it just makes the U.K. a far more affordable destination for Americans,” said Trafalgar USA president Paul Wiseman. “We love a strong dollar. When our dollar is buying more, it’s good for our travelers.”
Richard Launder, president of TravCorp USA, agreed: “It translates into even greater value in experiencing this beautiful country. Frankly we recommend taking advantage of that from a value standpoint and travel soon!”
Indeed, Tourico plans to take advantage of the market by adding more U.K. product in anticipation of rising demand, said Lauren Volcheff, executive vice president of global sales. While revenue from each individual tour booked will be slightly less, there will likely be more transactions making up for the lower cost.
Tourico has seen a huge spike in searches for England itineraries, Volcheff said. Other sites are seeing similar response from consumers. Hotels.com, for example, reports that hotel searches for U.K. destinations are up over 50% from last year.
Hotel rates have dropped as well. The Hotels.com Hotel Price Index for 2015 showed that U.S. travelers paid an average of $257 per night for a hotel in London. Following the Brexit vote, hotels prices are about half that. Four-star hotels in London, for example, are now as low as $82 a night during peak travel season in August.
While this is all good news for travelers, hotels might take a hit from lower rates. Research firm STR predicts business travel will be curbed, but international visits will increase. Similar to tours, hoteliers will be getting less revenue per room, but that may be balanced out by an increase in number of visitors.
“Frankly, until the U.K. determines timing of their withdrawal, it’s really too early to understand the full implications of Brexit on our industry,” concluded Launder.
While the long-term implications remain unknown, for now agents can expect to see more clients eager to book a trip to the region.